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Strategy

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published: 23 Mar 2018

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Abstract:
The Swiss company TAG Heuer, maker of luxury watches, is part of the LVMH group (Moet Hennessy Louis Vuitton). In 2015, CEO Jean-Claude Biver is deciding whether to launch its first-ever fully connected Swiss watch, manufactured in partnership with Google and Intel. Entering this new market presents an unprecedented challenge: making a watch based on a technology (microprocessors) that the Swiss have not mastered. Is TAG Heuer ready to compete in the digital space - and potentially without the traditional 'Swiss Made' label? Case B takes up the story following the successful launch of the TAG Heuer connected watch. Sales are beyond all expectations for the luxury Swiss watchmaker and its partners Intel and Google. There are a few surprises too – the consumers are older than they expected and the watches sell out far quicker than anticipated – hence the company runs into some supply chain issues.

Pedagogical Objectives:
To learn how a nation achieves international success in a specific industry and how multinational corporations enable the emergence of clusters and benefit from them. In particular, how the Swiss luxury watch industry (in particular TAG Heuer) reacted and dealt with the challenge from connected watches such as the Apple Watch. Four key issues are addressed: 1. The importance of the 'Swiss Made' label for this market. 2. How to make a connected watch 'eternal' in the spirit of traditional mechanical watches. 3. How TAG Heuer prepared for a profound digital transformation by learning from the technology cluster in Silicon Valley (locating a team of engineers there and managing the partnership with Google and Intel). 4. How a company dealt with digital disruption in a conservative industry – Swiss watchmaking. 5. How multinationals identify technology in other clusters – “technology scouting” - and set up relevant processes.

Keywords:
Watches, Luxury, Wearables, Connected Watches, Digital Transformation, Google, Intel, Clusters, Jean-Claude Biver, Global Strategy, Digital Disruption, Apple Watch, Swissmade, Silicon Valley, Switzerland

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published: 23 Mar 2018

  • Topic: Strategy
  • Industry: Digital transformation
  • Region: South America

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Abstract:
The case presents the “leapfrogging” opportunities for Latin America brought by the digital revolution and innovation. It examines the region’s economic and commercial achievements made possible by the huge penetration of mobile vs fixed broadband. In addition, digital transformation is helping to address social issues such as financial exclusion, unemployment and healthcare. Also, by improving transparency in the system, digital has the potential to reduce corruption, one of the biggest obstacles to doing business in Latin America.

Pedagogical Objectives:
This study provides an overview of the leapfrogging opportunities that digital transformation offers Latin America as well as the challenges to be overcome for it to deliver on the promises of the digital revolution. It can serve either as a complementary case to the Stefanini case package, or as a standalone piece for instructors teaching about digital challenges and opportunities in Latin America.

Keywords:
Digital Distruption, Emerging Markets, Blockchain, Latin America, Fintech, Ehealth, Ecommerce, Smart City, Leapfrogging, Technolatinas, Digital Revolution, Digital Transformation

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published: 23 Mar 2018

  • Topic: Strategy
  • Industry: Classical Music Industry
  • Region: Global

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Abstract:
For several decades, the classical music industry has been in decline with demand down, costs up and profits shrinking as many orchestras struggle for survival. Against this backdrop, André Rieu and his Johann Strauss Orchestra stand apart. Instead of competing like all the other orchestras, André Rieu has reconstructed market boundaries between classical music and pop concerts, creating a blue ocean of vast new demand. Rieu and his orchestra have stayed on the Billboard Top 25 Tours list for nearly 2 decades, right alongside the likes of Bruce Springsteen and Justin Bieber. His CDs and DVDs have sold more than 40 million copies versus 10,000 copies for a top classical music CD. This case reviews the competitive practice of the classical music industry and illustrates how Andre Rieu gained insight into unlocking new demand by looking to noncustomers of classical concerts, and how he reconstructed industry boundaries and created new market space, making the competition irrelevant. The case comes with a teaching note that reviews major concepts and frameworks of competitive strategy and blue ocean strategy in the context of the case and provides answers to the questions for class discussions.

Pedagogical Objectives:
The teaching of this case aims to 1) Identify the characteristics and limits of competitive strategic practice in the context of analyzing the conditions of the classical music industry 2) Demonstrate how André Rieu created a blue ocean of new demand in a declining industry through reconstructing market boundaries 3) Highlight the important role of noncustomer insights in enabling new demand creation 4) Drive home the key principle of blue ocean strategy – value innovation, which requires the simultaneous pursuit of differentiation and low cost 5) Review major concepts, frameworks and tools of blue ocean strategy in the course of analyzing André Rieu’s strategic move.

Keywords:
Classical Music Industry, Declining Industry, Entertainment, New Market Space, Market Creation, Blue Ocean Strategy, Value Innovation, Noncustomers, Demand Creation, Market Reconstruction, Red Ocean Strategy, Competitive Benchmarking, Differentiation, Live Performance

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published: 23 Mar 2018

  • Topic: Strategy
  • Industry: Catalog and mail-order houses; Computer processing and data preparation, Processing services
  • Region: North America

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Abstract:
On 30 May 2017, Amazon shares traded at a record high – above $1,000 – surpassing the share price of Google parent Alphabet. Started as an online bookstore 22 years earlier, Amazon has achieved uninterrupted growth by becoming the largest internet bookstore, the largest online marketplace, a media company, and the most successful IT service provider. It recently expanded into the bricks-and-mortar retail business, launching Amazon Books across the US and beta-testing Amazon Go in Seattle. As of May 2017, it was ranked the world’s most innovative company and the fourth largest company by market capitalization. The case explores Amazon’s path to growth and its successes and failures along the way. Successful strategic moves include Amazon Marketplace, Prime, Amazon Web Services, and Kindle. Failures included Auctions, A9 Search Engine, Endless, and the Fire Phone. Identifying commonalities and differences among them, the case shows the causes and consequences of Amazon’s at-once stellar performance and severe setbacks. It applies Blue Ocean Strategy concepts to analyze its market-creating logic for future growth.

Pedagogical Objectives:
The case aims to understand the root of a company’s high performance and growth. A company, in this case study Amazon, makes a series of strategic moves in pursuit of growth. Some of them largely contributed to Amazon’s growth and market dominance; some of them made Amazon to experience a serious setback. The case analyzes these strategic moves and finds out key commonalities and differences between the two, aiming to make the following learning points: 1) There is no perpetually excellent company – it can be brilliant at one moment and wrongheaded at another. 2) Amazon created a series of new markets by multi-faceted business offerings from online retailing to media and IT services. Those strategic moves opened and captured new market space instead of exploiting existing markets. By focusing on delivering meaningful value to buyers, Amazon made a significant leap in demand and achieved high growth. Furthermore, it eventually lowered the cost structure as a mass of buyers flocked and were locked-in by Amazon’s unprecedented utility. 3) Amazon jumped into many attractive industries and leveraged its entrenched resources and capabilities to bring intense competition against incumbents. These strategic moves, anchored in red ocean traps, focused on offering higher value or lower cost than the rivals, but they were not necessarily bought in by customers. 4) Key difference between Amazon’s success and failure can be found in the presence of value innovation. Amazon achieved high growth regardless of industry condition when they pioneered a new strategy that opened up a new value-cost frontier through a step change in the kind and degree of value offered, hence creating a new market and making competition irrelevant. By contrast, Amazon failed when it focused on delivering novelty technology without buyer value or simply exercised cost leadership in order to beat high-performing incumbents.

Keywords:
Blue Ocean Strategy, Blue Ocean Shift, Innovation, Growth, Strategy, Corporate Strategy, Failure, Technology Innovation, Market Creation, Competition, Amazon, Online Retailing, Amazon Web Services, Jeff Bezos, Prime

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published: 26 Feb 2018

  • Topic: Strategy
  • Industry: Chemical Industry
  • Region: Asia

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Abstract:
This condensed case describes the attempts of a successful Swiss MNC to expand in Asia. Despite 100 years of experience in the region, its exposure remains limited. Globally run divisions continue to favour traditional western markets. Attempts to strengthen the geographic dimension with the opening of a regional headquarters in Hong Kong fail. Will the MNC miss out on Asia's booming markets?

Pedagogical Objectives:
The case exemplifies the problem of MNCs that are globally managed and face major shifts in the geography of their business. It goes further than discussing global-local or headquarter-subsidiary dualities by adding a regional dimension, both strategically and organisationally. As such, it deals with the fundamental question of the organisational structure of a divisionalised, multinational firm.

Keywords:
Multinational Management, International Strategy, International Organisation, Regional Headquarters, Subsidiaries, Asia

published: 26 Feb 2018

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Abstract:
The case describes how 30-year old Freddy Macnamara (CEO) launched Cuvva, a start-up in the UK car insurance industry in 2014, which pioneered mobile-only car insurance via a pay-as-you-ride application. Initially targeted at drivers who wanted to drive someone else’s car (Cuvva for Sharers), it then developed mobile-only insurance for owners willing to buy insurance only for the rare occasions that they used their cars (Cuvva for Owners). As the Cuvva model gains traction with customers, its impact is tracked by incumbents such as Admiral, that begin developing rival products. The case chronicles Cuvva’s origins, milestones, and competitors in the UK car insurance industry up to early 2017, as well as explaining the economics of car insurance.

Pedagogical Objectives:
The case was developed for an MBA course on FinTech and the Disruption of Financial Services but has also been used with executive audiences. Cuvva, an example of “InsurTech”, is disrupting the insurance industry with a digital business model. While Cuvva for Sharers only extends the insurance market, the Cuvva for Owners product is a genuine disrupter (as defined by Clay Christensen). The case allows discussion of the economics of the (UK) car insurance industry, key success factors that create a value-creating insurer, the viability of new business models that challenge these factors, and how a specific disrupter can develop a viable, value-creating competitive position.

Keywords:
Insurtech, Fintech, Insurance Industry, Disruption, Digital Business Model, Startup, Digital Platform, Insurance Eco-System, Insurance Supply Chain, Pay as You Go Insurance, Challenging Industry Leaders, Competitive Advantage, Economics of Insurance, Competition in Uk Car Insurance

published: 26 Feb 2018

  • Topic: Strategy
  • Industry: Digital transformation
  • Region: South America

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Abstract:
The case presents the “leapfrogging” opportunities for Latin America brought by the digital revolution and innovation. It examines the region’s economic and commercial achievements made possible by the huge penetration of mobile vs fixed broadband. In addition, digital transformation is helping to address social issues such as financial exclusion, unemployment and healthcare. Also, by improving transparency in the system, digital has the potential to reduce corruption, one of the biggest obstacles to doing business in Latin America.

Pedagogical Objectives:
This study provides an overview of the leapfrogging opportunities that digital transformation offers Latin America as well as the challenges to be overcome for it to deliver on the promises of the digital revolution. It can serve either as a complementary case to the Stefanini case package, or as a standalone piece for instructors teaching about digital challenges and opportunities in Latin America.

Keywords:
Digital Distruption, Emerging Markets, Blockchain, Latin America, Fintech, Ehealth, Ecommerce, Smart City, Leapfrogging, Technolatinas, Digital Revolution, Digital Transformation

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published: 26 Feb 2018

  • Topic: Strategy
  • Industry: Financial services
  • Region: Global

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Abstract:
The case discusses different steps which Mastercard has followed in its digital transformation journey. They involve opportunity framing, creating innovation pathways, finding digital transformation opportunities, and innovation with partners within adaptive ecosystems. With the objective to stop competing with other payment processing firms (like Visa or Amex) and start competing with cash, Mastercard has moved from an undifferentiated processor of payments to a builder of unique technological platforms.

Pedagogical Objectives:
- Illustrate a four-step digital transformation journey
- Demonstrate how companies can build innovation pathways for digital transformation and beyond
- Provide examples of successful ecosystem building strategies in for-profit and non-for-profit sectors

Keywords:
Strategy, Digital Trasformation, Fintech, Ecosystems, Platforms, Innovation, Innovation Labs, Innovation Processes, Partnerships

published: 23 Feb 2018

  • Topic: Strategy
  • Industry: Radio and Television equipment, computers
  • Region: North America

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Abstract:
This case accompanies 1) a collection of business press articles; 2) two video clips; 3) a teaching note; 4) lecture slides. While the case and articles will be assigned as pre-reading, the video clips and lecture slides will be shown in the classroom by the instructor.

Pedagogical Objectives:
This case shows how a series of blue ocean strategic moves by Apple Inc. has transformed it from a computer manufacturer into a consumer electronics giant. The aim here is to illustrate how blue ocean strategy concepts, tools, and methodologies are applied in the context of managing business portfolios at the corporate level.

Keywords:
Blue Ocean Strategy, Value Innovation, Apple, Corporate Portfolio Management, Corporate Strategy, Growth, Transformation, Consumer Electronics, Corporate Governance, Value Creation, Strategy and Implementation

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published: 23 Feb 2018

  • Topic: Strategy
  • Industry: Entertainment, Circus
  • Region: Global

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Abstract:
This is the first of a two-case series. The first Case (A) discusses the evolution of the circus industry up until the emergence of Cirque du Soleil. This case provides a detailed discussion on the structure of the circus industry to make possible a rich analysis of how its industry attractiveness has changed over time and the challenges the industry now confronts. The case reveals that the industry had become a red ocean with limited profit and growth potential. To achieve this, students are asked to address the following questions: 1) How would they assess the attractiveness of the circus industry in the early 1980s? What would you conclude from your industry analysis? 2) What were the factors the traditional circuses competed on? What made these factors more or less relevant over time? The second case (B), shows how one company, Cirque du Soleil reconstructed the industry to create a blue ocean. It is an excellent and important complement to the first case. A video called 'The Evolution of the Circus Industry' is available for free faculty download at www.blueoceanstrategy.com. This case has been featured on the ecch website, click to view the article. “The Evolution of the Circus Industry (A)” case has received the 2009 ECCH overall winning case award and won the Strategy and General Management category in the 2006 ECCH European Case Awards.

Pedagogical Objectives:
The case series is designed to serve a variety of purposes in the value innovation and creating new market space teaching module of an MBA strategy course or executive education programme. The case series can be equally used individually in a standalone module on value innovation or as part of a sequence of three to four sessions. In both instances, the instructor can best use it to cover the following topics: (1) value innovation logic (as compared to industry and competitive analysis); (2) the concept of value curve; and (3) the six paths analysis for creating new market space. A teaching note is available to accompany this cases series. A video clip free for instructor download is available at www.blueoceanstrategy.com. **ecch European Case Awards Category Winner 2006 and ecch European Case Awards Overall Winner 2009

Keywords:
Circus and Live Entertainment Industry, Value Innovation, Strategy, Blue Ocean Strategy, Creating New Market Space, Redefining Industry Boundaries, Competition

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